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Gold Price Futures (GC) Technical Analysis – Buyers Chewing Through Resistance; Next Objective $1687.80

James Hyerczyk

Gold futures are trading at their highest level since March 26 shortly after the regular session opening on Monday. The move is being fueled by concerns over a global recession caused by the coronavirus pandemic. A relatively flat U.S. Dollar is also helping to boost demand for the dollar-denominated asset.

At 12:43 GMT, June Comex gold futures are trading $1674.60, up $28.90 or +1.76%.

Short-term, increased demand for stocks may actually be helping gold because it dampens the chances of market call selling, while freeing up funds to buy the precious metal. In other words, gold is being treated like an investment instead of a funding asset.

Longer-term, the tremendous amount of fiscal and monetary stimulus injected into the financial system recently is bullish for gold.

Daily June Comex Gold

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through the two tops at $1698.00 and $1707.80 will change the main trend to up. A move through $1576.00 will signal a resumption of the downtrend.

The short-term range is $1698.00 to $1576.00. Its retracement zone at $1651.40 to $1637.00 is new support.

Additional support zones come in at $1610.50 to $1580.40 and $1575.50 to $1546.60. Combining the two zones makes $1580.40 to $1575.50 a major support cluster.

Daily Technical Forecast

Based on the early price action and the current price at $1674.60, the direction of the June Comex gold futures contract the rest of the session on Monday is likely to be determined by trader reaction to the downtrending Gann angle at $1667.80.

Bullish Scenario

A sustained move over $1667.80 will indicate the presence of buyers. The next target angle is $1687.80. This is the last potential resistance angle before the $1698.00 and $1707.80 main tops.

Bearish Scenario

A sustained move under $1667.80 will signal the presence of sellers. This could trigger a break into a short-term Fibonacci level at $1651.40, followed by a short-term 50% level at $1637.00 and an uptrending Gann angle at $1624.00.

This article was originally posted on FX Empire

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